The Treasury grants $ 8.7 billion for loans to minority communities | Your money

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WASHINGTON (AP) – The US Treasury Department on Tuesday announced the release of $ 8.7 billion to help increase lending to small businesses and people belonging to minorities and to people living in the poorest communities with a limited access to banking services.

Funds from the Emergency Capital Investment Program, which was established this year, will go to 186 community financial institutions. Vice President Kamala Harris and Treasury Secretary Janet Yellen discussed the investments in remarks at the Freedman’s Bank Forum, which was hosted by the Treasury Department.

“The wealth gap persists today, the homeownership gap persists,” Harris said of the need for investment. “Black entrepreneurs are three times more likely to report that a lack of access to capital negatively affects their profit margins. “

Yellen pointed out that there would be a direct link between the money provided and businesses in local communities, saying she had recently met the owner of an Atlanta tea company called “Just Add Honey” who had not the financial credit to keep all of its stores open. during the pandemic.

“Here it’s very easy to relate politics to personnel,” Yellen said. “This will prevent owners of small businesses of color from closing two of their stores. And best of all, it will help people open two more.

Black Americans make up 13.4% of the US population, but Federal Reserve figures show they only control 4.3% of household wealth. More than half of the wealth of black households comes in the form of pension rights, which cannot be passed on to future generations. This inequity makes it more difficult for people living in predominantly black communities to qualify for business loans and mortgages in ways that help them increase their equity.

The $ 8.7 billion will go to institutions headquartered in 36 states, as well as Guam and Washington, DC. About 54% of funds will go to banks and 46% to credit unions. Distributions will range from over $ 200 million for the larger institutions to less than $ 100,000 for the smaller ones.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


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